If the New Year
is considered all about new beginnings, don’t you think that this is the right
opportunity to move towards financial prudence? Although the New Year might
still be a few days away, but this is the right time to get some personal
financial matters in place, before the Christmas and New Year celebrations take
over. The simplest thing to do is to include any money related resolution to
your list. Doing so might seem to be a spoiler but this should well be the one
decision that you were able to put in practice and get paid handsomely in the
long run. If you wish to plan ahead of time so as to stay on top of your
personal finances, here are some points with which you could start off.
- Learn more about your finances: In case you think that it is solely the duty of your financial advisor or planner to know about all kinds of financial products, you’re grossly mistaken. Apart from the financial planner, it is also the investor’s responsibility to know where to invest his dollars. Even the investors who prefer to stay with simpler products should study their investment choices. The problem with most people is that they don’t have an inclination towards reading on finance. Well, you don’t have to become a CFA but you should know the basics. Having a basic understanding will help you get a grip on the bigger picture.
- Reflect on your cash flow: Another simple way of getting disciplined and getting into the habit of saving is to first find and then plug the loopholes in your expenses. If investing is important for you, track the cash flow. Once you figure out your avoidable expenses, you can easily channelize money into savings and investments. People are usually undisciplined and they love to be savers, not investors. So, jot down where you spend, what amount you spend.
- Start with a small amount: If you find it difficult to save and invest, the best way to do so is to start small. Many people will think that small investments take them nowhere. A small amount out away may look like nothing but you will rather be surprised to know how this amount may add up. Hence, keep saving money in small amounts so that you can soon see your fund growing.
- Manage your debts: While you investigate your expenses, make sure you pay close attention to your loans. In case you realize that you have too many, it is time that you consolidate them. You can either seek help of the debt consolidation programs or take out debt consolidation loans in order to combine all your loans into a single monthly payment. Before doing that, remember that all loans are not bad and hence keep paying the ones are used to build assets, like mortgage and car loans.
Hence, if you’re
someone who is dreaming of spending a debt-free 2015, take into account the
above mentioned tips to save your dollars. At the same time make resolutions to
invest safely.